Shoppers are turning to private label products as opposed to national brands as they become more prudent across Europe and demand greater value for money, according to new research from SymphonyIRI Group.
According to the latest report ‘Retail Private Label Brands in Europe’, shoppers now consider many private label products to be as good as national brands, and in some countries, better.
In fact, the value share of private label goods has increased in every country, except in the United Kingdom, and is now an average of 30% across the region. For consumers, a typical European private label shopping basket costs on average 30% cheaper than one filled with national brands.
The position varies from country to country. In the United Kingdom, the value share is 49.2% of all FMCG products sold, compared to 16.1% in Italy. And, in USA, this figure is just 18.5%.The greatest increase in private label was in Spain, where the leading retailers have continued to invest in developing multi-tier ranges, recognising that shoppers are turning ‘back to basics’ to save money.
The United Kingdom is the only country with a decrease in market share reflecting the high level promotion activity on national brands. France sees its value share remain flat at 31.0%, a result of national brand manufacturers stepping up their marketing activities while private label promotional activities decreased.
Rod Street, vice president of International Consulting at SymphonyIRI Group, said: “European shoppers are becoming much more inclined to assess the quality and value of the products that they buy. With rising unemployment and a major economic crisis in Europe, it’s understandable that the consumer will want to budget for the overall price of their weekly shop and secure maximum value for money.
“Consumers often perceive private label brands to be ‘real’ brands in their own right. As retailer own-label products continue to raise their game, national brands will need to focus on where and how to defend their share of wallet.
“As well as innovating at the product level, retailers have developed clear branding and assortment strategies and leverage their control of shelf space and pricing to drive profile. This presents a real threat to national brands. However, national brands are fighting back, developing new products and technologies to bolster differentiation and becoming more aggressive with pricing and promotional strategies.”
Source: SymphonyIRI Group